1. Israel is making a mistake by performing unequal hostage swaps. They exchanged 5 militant Lebanese prisoners for the remains of 2 Israeli soldiers. I know it is their moral code, but this will only encourage more kidnappings/killings of Israelis. They keep giving their enemies positive reinforcement with these exchanges. Dumb.
2. Double-standard on the N-word. I hate it. Read the story. Again, Jesse Jackson deserves no respect by the media or the population at large.
3. Score one for Dr. Aktins (and the Mediterraneans), as the low-carb (high-fat high-protein) and Mediterranean diets were found to be superior for weight loss to a low-fat diet after 2 years of follow-up.
4. The JibJab crew has another great political satire video. Very funny, as usual.
5. The price of oil fell sharply for the 2nd straight day. Jury is still out whether the long-term trend is still intact and this is a correction (just as all of the other commodities have corrected signficantly over the past few weeks). Also, few, if any, stories tied this week's decline to Bush's wonderful announcement about moving forward with plans to drill offshore. In fact, given the drop in consumption (driving and flying have decreased, companies are figuring out more efficient ways to transport goods), it may be that the decreased demand has increased supply, thus decreasing the price of oil. Furthermore, the continued panic about further economic downturns in the US and around the world is not bullish for the price of oil. The prices of oil are also driven by the large amount of ETFs that are tied to commodities. Investors looking for a safe-haven in this bear market that has ravished the financial sector have moved lots of money to energy stocks/ETFs. However, as witnessed by the monster rally in the stock market today, led by the 10% surge in financials, it appears that sector rotation is taking place, and money is shifting back from energy to financials. I wonder, did Bush's announcement of drilling offshore also fuel the rally in the financial sector today.
Also, let's look at the chart of the XLE (iShares Energy ETF). From a technical analysis standpoint, energy has been weakening for the past several weeks. The chart was calling for this sell-off. Why?
1. RSI at top of chart has been very weak.
2. Double top formed in main price action
3. MACD (another momentum indicator) has been very weak/declining for weeks.
4. Money flow indicators (On balance volume and Chalkin money flow, both at bottom of chart) indicate that net flow of money has been OUT of energy since the end of May/early June.
So, the announcement by Bush to drill offshore was like punching a man while he was already beaten up and laying on the ground bleeding. Of course, people are going to give him the credit for dropping the price of oil. The timing and the chart do NOT support this whatsoever.
6 comments:
Wow, the mainstream media refused to give W credit for something. Shocker. I didn't expect to see many reports to that effect, either. I have long given up on seeing objective reporting in the "news."
BTW - What would happen if you won a war, and nobody reported it??
Answer - Pick up todays's paper!
Can you at least give credit for W's intelligence to predict the exact day all your fancy charts came together to start the decline in oil prices, so he could try to get credit? I mean, I know W is to blame for everything from Iran's homophobia to Favre's retirement, but could you give him that credit?
Sure, the RSI's and EPG's and all that on your chart did not cross where you like, but the fact remains -- W made his announcement and prices started to fall. I like to think W didn't push a man when he's down but rather gave the final push he needed at the right time.
But that would imply giving W credit for something. And no one wants to do that.
So, let's just call it -- an incredible lucky coincidence.
I do applaud the mention of supply and demand in your article. Of course, you only think lowering demand can push the levers of the market, but that is half the battle!
Oh, and Kudos on items 1 through 4. There undoubtedly will be increased kidnappings in Israel now, and I am pained that we have to keep learning that lesson in such a tragic way.
It took a slur on the Obamessiah for everyone to agree with what the rest of us already knew -- Jesse is a self-centered charlatan. Hopefully, he will go away (even though I know he won't).
What's the big picture here? Oil is not renewable. Burning/refining it puts holes in the ozone layer.
Who gives a rat's hole about whether the *announcement* caused/will cause the price drop or the actual increased supply will cause the price drop?
I care, because I would like to pay less for gasoline.
I agree we should develop better energy sources, but that does not mean I should pay exorbitant gasoline prices if I don't have to do so.
Steve - I can't help but wonder whether this seemingly random hating on Jesse and the 'double standard' has some tie to what happened to Imus, even though you've distanced yourself from him of late. If it's true (and your faithful blog-readers have little else to go on).... c'mon! (1)We don't even know whether he said it (2) if so, it was said in private, not over the airways in an attempt to amuse white males between 18-54 at the expense of others.
Don,
Fine, I give W credit to be smart enough (I mean have smart enough advisors) to time the announcement when oil had already been breaking down on its own. BTW, the RSI and EPG (MACD) were performing correctly according to the laws of technical analysis. They foretold the impending breakdown in price.
Will,
Yes, I'm sorry, it was a weak attempt for some retribution for my former "friend" Don Imus. Your points are valid...thanks for keeping me honest.
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